Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

The changes in carrying amounts of goodwill during the three months ended March 31, 2014 were as follows:



	Metals Segment			Plastics Segment		Total
Balance as of January 1, 2014
Goodwill	$	116,533		$	12,973	$	129,506
Accumulated impairment losses	(60,217		)	—		(60,217		)
Balance as of January 1, 2014	56,316			12,973		69,289
Currency valuation	(535		)	—		(535		)
Balance as of March 31, 2014
Goodwill	115,998			12,973		128,971
Accumulated impairment losses	(60,217		)	—		(60,217		)
Balance as of March 31, 2014	$	55,781		$	12,973	$	68,754

During the fourth quarter of fiscal year 2013, the Company changed its goodwill testing date for both the Metals and Plastics reporting units from January 1 to December 1. Based on the December 1, 2013 test, the Company determined that there was no impairment of goodwill. The Metals and Plastics reporting units each had estimated fair values that exceeded carrying values by 13% and 23%, respectively, as of December 1, 2013. For the three months ended March 31, 2014, the Company’s Metals reporting unit experienced weaker demand than anticipated, which led to larger than anticipated negative financial operating results for the period. Based on these results, as noted below, management assessed whether an interim goodwill impairment test should be performed for the Metals reporting unit and concluded that one was not required. As of March 31, 2014, the impact of the negative quarterly financial operating results on the fair value estimate of the Metals reporting unit is not significant. Current trends within the Metals reporting unit as of March 31, 2014 suggest that future period cash flow estimates are still reasonable. Additionally, the multiples of earnings before interest, taxes, depreciation and amortization for metals companies as of March 31, 2014 continue to support the multiple used to value the Metals reporting unit at December 1, 2013. Management believes that it is more likely than not that the Metals reporting unit fair value has not decreased below its carrying value as of March 31, 2014. However, if positive trends do not continue to build and/or there is a continued unfavorable divergence in actual financial results compared to those used to estimate the Metals reporting unit fair value at December 1, 2013, the fair value of the Metals reporting unit could be impacted significantly which may result in a goodwill impairment charge. Additionally, future declines in the Company’s share price may also result in a conclusion that that the fair value of one of both of its reporting units has declined below its carrying value.

The following table summarizes the components of intangible assets:



	March 31, 2014				December 31, 2013
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Customer relationships	$	117,141	$	57,579	$	117,794	$	55,157
Non-compete agreements	3,888		3,652		3,888		3,569
Trade name	7,953		2,114		8,025		1,939
Developed technology	1,400		1,069		1,400		953
Total	$	130,382	$	64,414	$	131,107	$	61,618

Substantially all of the Company’s intangible assets were acquired as part of the acquisitions of Transtar on September 5, 2006 and Tube Supply on December 15, 2011.

For the three months ended March 31, 2014 and 2013, the aggregate amortization expense was $2,916 and $2,956, respectively.

The following is a summary of the estimated annual amortization expense for 2014 and each of the next 4 years:



2014	$	11,639
2015	10,872
2016	10,872
2017	8,849
2018	4,728

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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